BEIJING - China's largest auto show over the past two weeks exhibited the latest that the world's largest electric vehicle (EV) market has to offer. But on display was also the intense competition in this growing yet overcrowded industry.
The Beijing International Automotive Exhibition opened on April 25 with the chairman of smartphone giant and EV newcomer Xiaomi ribbing his rivals for "rolling out all sorts of policies to intercept our orders".
And over the course of the next nine days, carmakers that showcased a record 278 new energy vehicles (NEVS) there sought to outdo one another with freebies and jazzed-up vehicles.
It was a microcosm of the industry-wide tussle that has seen companies slash prices, swallow losses and upgrade their technologies to fight for a share of the market.
This competition is expected to heat up further, with one NEV honcho forecasting a looming "bloodbath". NEV is a term used in China to describe vehicles powered by energy sources apart from fossil fuels including but not limited to pure battery-electric cars and plug-in hybrids.
Only a fraction of the country's nearly 200 NEV makers will survive after the industry matures, analysts say.
PRICE WARS
NEV makers are currently focused on expanding or retaining their market share, and are doing so by cutting prices and offering promotions, said Mr Zhang Hong, secretary-general of the China Automobile Dealers Association's electric vehicle chapter.
The competition is particularly fierce among mid- to low-end passenger cars priced under 200,000 yuan (S$38,000), he told The Straits Times.
Amid a price war as companies strive to boost sales, "companies" profits from car sales are meagre, and some even incur larger deficits the more that they sell", he said.
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